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Home , 111 Murray Street, 125 Greenwich Street, 130 William, 140 Broadway, 1 New York Plaza, 1 Wall Street

OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

ALLIANCE FOR DOWNTOWN Q1 2015 LOWER REAL ESTATE MARKET OVERVIEW

COMMERCIAL OFFICE MARKET

WeWork Signs one of Manhattan’s Largest Deals in Q1 2015

Following a robust 2014 with the highest recorded activity in nine WeWork signs first quarter’s years, ’s leasing slowed somewhat in the first quarter of this year. Down 32% from last quarter and 29% year- over-year, leasing is expected to regain momentum in the year ahead. And with the second quarter dawning and a spring thaw 3rd Largest underway, brokers report that tenant interest is brisk and a pick- up in leasing is expected in the second quarter. deal citywide in Lower Manhattan While leasing was less active this quarter, interest in relocating to or expanding in Lower Manhattan remained strong. Four out of the top five deals were relocations and expansions among new largest deal citywide. With a lease for 234,879 square feet in and existing tenants. WeWork opened its third Lower Manhattan 85 , WeWork now occupies a total of more than location at 85 Broad Street early in the second quarter, signing 744,000 square feet of commercial space and joins the ranks of the first quarter’s largest deal in Lower Manhattan and the third Lower Manhattan’s largest tenants.

LOWER MANHATTAN LEASING ACTIVITY, Q1 2011 - Q1 2015 Source: Downtown Alliance, CBRE

2.0 Million 1.8 Million 1.6 Million 5-Year Quarterly Average: 1.4 Million SF 1.4 Million 1.2 Million 1.15 Million 1.0 Million

SF Leased 0.8 Million 728,416 0.6 Million 0.4 Million 0.2 Million 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2011 2012 2013 2014 2015

Lower Manhattan Real Estate Year in Review | Q1 2015 1 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

Other top deals included the relocation of Planned Parenthood LOWER MANHATTAN RELOCATIONS BY INDUSTRY to 65,000 square feet in 123 William Street, following the sale of SECTOR, Q1 2011 - Q1 2015 Source: CBRE its office condominium in Midtown. Banco Santander, a Spanish bank expanding in New York , is relocating and consolidating Consumer Products its headquarters at a 42,128-square-foot space at 200 Liberty 10% Street in Brookfield Place.Namely , a human resources software Professional company, is relocating from Midtown to 41,982 square feet in Services 7% 195 . Education 5% TAMI Relocations by 47% TAMI accounted for Law Industry 8% Sector Other 47% 11% FIRE All Relocations by SF since 2011 12%

These tenants are contributing to an ongoing trend, joining More than more than 172 tenants who have signed leases to relocate to Lower Manhattan just since 2011. According to CBRE, Lower Manhattan has seen a net gain of more than 7 million square feet since 2011, reflecting the addition of 2 million square feet in the past year alone. The trend cuts across a diverse set of 7 Million SF sectors, but the TAMI sector is leading the charge, accounting for Net Relocations to Lower Manhattan 47% of all relocations by square footage. since 2011 TOP 15 LEASES, Q1 2015 Source: Downtown Alliance, CBRE, CoStar, Colliers International

SF Leased SF Leased Tenant Name Sector Tenant Name Sector Transaction Transaction Location Location Type Type Empire BlueCross WeWork 234,879 Professional 22,961 1 9 BlueShield FIRE 85 Broad Street Expansion Services Expansion 1 Liberty Plaza Ambac Financial Group 79,740 FMS Wertmangement 2 FIRE 21,760 1 Renewal 10 Service GmbH FIRE Relocation Planned Parenthood 65,000 88 Pine Street 3 Nonprofit 123 William Street Relocation 20,120 NBBJ 11 Moving Within FIRE Banco Santander 42,128 4 FIRE LM Relocation Judlau 18,000 Professional 12 Namely 41,982 42 Broadway Relocation Services 5 TAMI Relocation Girl Scouts of Greater 17,500 Schnader, Harrison, Segal 38,161 13 New York Nonprofit Professional Relocation 6 & Lewis Renewal & 40 Services 140 Broadway Expansion Regency International 16,981 D.F. King & Company 25,650 Professional 14 Designs Other 7 Relocation Relocation Services 50 Broadway School 24,343 8 Construction Authority Government Bliss World Holdings (HQ) 15,900 Relocation 15 Other 17 Battery Place North 200 Relocation

Lower Manhattan Real Estate Year in Review | Q1 2015 2 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

Robust Relocation Activity Continues LOWER MANHATTAN RELOCATIONS BY INDUSTRY SECTOR, Q1 2015 In the first quarter, this trend continued and was fueled by deals Source: Downtown Alliance of all sizes and industries. Several nonprofits committed to Government relocate to Lower Manhattan, including Girl Scouts of Greater 7% New York (moving to 17,500 square feet in ), Professional Action Against Hunger (relocating to 15,641 square feet in Services 12% Nonprofit 1 ) and InterExchange, a cultural exchange 31% program provider (taking 14,513 square feet in 100 Wall Street). Q1 2015 Other Several additional TAMI firms have also committed to set up shop 13% Relocations downtown and will join the more than 800 TAMI tenants working By Sector in Lower Manhattan today. They include: FIRE • Zeno Group, a marketing agency, relocating from Midtown TAMI 20% South to 12,000 square feet in 140 Broadway; 17% • Shareablee, a social media analytics firm, which has signed a lease for 8,211 square feet at 123 William Street and will be moving from Midtown South; More than • Union Design, a visual communications design company, TAMI relocating to 3,692 square feet in 50 Broad Street from Midtown South. Tenants

TOP 20 RELOCATIONS, Q1 2015 Technology, Advertising, Media, & Information Source: Downtown Alliance, CBRE, CoStar, Colliers International

SF Leased SF Leased Tenant Name Tenant Name Previous Sector Previous Sector Location Location Location Location Planned Parenthood 65,000 InterExchange 14,513 1 Nonprofit 11 Nonprofit 123 William Street Midtown 100 Wall Street Midtown South

Banco Santander 42,128 Permasteelisa Group 13,341 Professional 2 FIRE 12 200 Liberty Street Multiple Midtown South Services

Namely 41,982 Le Pain Quotidien (HQ) 12,667 3 TAMI 13 Other 195 Broadway Midtown 50 Broad Street Midtown South New York City School 24,343 Zeno Group 12,000 4 Construction Authority Government 14 TAMI 140 Broadway Midtown South 17 Battery Place North FMS Wertmangement 21,760 Skyline Engineering 6,770 Professional 5 Service GmbH Midtown FIRE 15 88 Pine Street Midtown South Services 88 Pine Street Judlau 18,000 Professional Union Design LLC 3,692 6 16 TAMI 42 Broadway Midtown South Services 50 Broad Street Midtown South Girl Scouts of Greater 17,500 Murphy Kennedy Group 3,027 Professional 7 New York Nonprofit 17 Midtown 61 Broadway Services 40 Wall Street Regency International 16,981 The Pegasus Group 2,767 8 Designs Other 18 FIRE Midtown South 115 Broadway Midtown 50 Broadway Bliss World Holdings (HQ) 15,900 Casablanca Capital 2,390 9 Other 19 FIRE Midtown South 1 World Trade Center Midtown

Action Against Hunger 15,641 Banks and Sadler 1,778 Professional 10 Nonprofit 20 1 Whitehall Street Midtown 80 Midtown Services

Lower Manhattan Real Estate Year in Review | Q1 2015 3 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

Rents Reach Highest Quarter-End in Market’s History OVERALL AVERAGE ASKING RENTS BY MANHATTAN SUBMARKET, Q1 2010 VS. Q1 2015 Rents are on the rise across building classes in Lower Source: Cushman & Wakefield Manhattan. Class A rents rose 12.5% over the last quarter to $80 an average asking rent of $61.90. This represents the highest $75.44 quarter-end asking rent in the market’s history and the first $70 quarter-end to breach $60 ever. This quarterly increase reflects $63.28 $61.93 $60 $57.58 the addition of availabilities at (formerly Chase $50 Manhattan Plaza) where space is being marketed in the range of $46.32

$62 to mid $70’s per square foot, depending on floor. $40 $38.95

Asking Rent/SF $30 Asking rents in several premium Lower Manhattan properties are now on par with average asking Class A Midtown rents. Other $20 Class A buildings in Lower Manhattan with asking rents at the $10 top of the market include 1 World Trade Center, 225 Liberty 2010 2015 2010 2015 2010 2015 Street, 300 Vesey Street, and , where $0 Lower Manhattan Midtown South Midtown rents range from mid-$70’s per square foot for 300 Vesey Street to rents that reach as high as $100 per square foot for floors at the top of 1 World Trade Center. Still, these premium properties Lower Manhattan Class A rents reached are a relative bargain to comparable properties in Midtown and Midtown South, where asking rents for highly prized spaces can $61.90 climb to $200 per square foot. the highest quarter-end asking rent in the market’s history HIGHEST AVERAGE ASKING RENTS BY MANHATTANWEST CONCOURSE SUBMARKET Source: Downtown Alliance, CoStar

$225 Lower Manhattan Midtown Midtown South $200

$175

$150

$125

$100 MT $81.00 Asking Rent /SF AskingRent $75 MTS $72.20 LM $61.90 $50

$25 Midtown Average

1 World 4 World 300 Vesey 28 Liberty 9 West 57th 375 Park 667 7 Bryant 860 641 Avenue 225 Park 90 Fifth Trade Trade Street Street Street Avenue Madison Park Washington of the Avenue Avenue 2012 Center Center Avenue Street Americas South

Lower Manhattan Midtown South Midtown Class A Average Asking Rent Class A Average Asking Rent Class A Average Asking Rent

Lower Manhattan Real Estate Year in Review | Q1 2015 4 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

Lower Manhattan’s average Class A asking rents have increased 49% since the trough post-recession, outpacing Midtown’s Lower Manhattan’s growth of 24% and on par with Midtown South’s increase. Lower Manhattan’s Class A asking rent growth reflects the repricing of Class A Asking Rents up space as well as the addition of new construction and existing Class A space to the market.

Class B rents in Lower are on the rise as well, growing to $41.90, its highest level since the first quarter of 2009, and up 9% year over year. With this upward pressure 49.3% in rents across classes, brokers report that market dynamics from the market trench are shifting, and it is increasingly challenging for tenants to in Q1 2010 find leasing opportunities below $40 per square foot in Lower Manhattan. Meanwhile in the rest of Manhattan, the average asking Class B rent in Midtown South is $65.70, a 52% premium over Lower Manhattan and Midtown’s average Class B asking 49.2% 23.5% rent is $54.70, a 26% premium over Lower Manhattan. increase in increase in MTS MT

LOWER MANHATTAN CLASS A AND CLASS B AVERAGE ASKING RENTS, Q1 2010 - Q1 2015 Source: Cushman & Wakefield

$65 $61.90 $60

$55

$50

$45

Asking Rent/SF $41.50 $41.90 $40 $36.40 $35

$30 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2010 2011 2012 2013 2014 2015 Class A Class B

Lower Manhattan Manhattan Real Real Estate Estate Year inYear Review in Review| Q1 2015 | 2014 5 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

Vacancy LOWER MANHATTAN CLASS A AND B VACANCY RATES, The vacancy rate trended upwards slightly in the first quarter, Q1 2014 - Q1 2015 up 0.7 percentage points from last quarter to 10.4%, with the Source: Cushman & Wakefield addition of space at 28 Liberty to the market and slightly sluggish 14% first quarter leasing activity. Still, the vacancy rate is down 0.8 13.1% 12.9% percentage points year-over-year, reflecting positive absorption 12% over the past year. The amount of available space is down 4.5% year-over-year. 10% 8.5% 8% Over the past year, Class B office buildings in Lower Manhattan 6.5% have reflected the largest reduction by total square footage in 6% available space across classes. Steady leasing activity in Class B buildings has led to a 22.7% reduction in available space in this 4% market year-over-year. The Class B vacancy rate is 6.5%, down 2.0% year-over-year. 2%

Meanwhile, vacancy rates in Midtown and Midtown South are Q1 Q2 Q3 Q4 Q1 basically flat over last quarter and down slightly year-over-year as 2014 2015 well. Manhattan-wide, the vacancy rate is 9.2%. Class A e Class B

Commercial Sales The sale of 180 Maiden Lane to MHP Realty Services and Clarion Lower Manhattan Overall Vacancy Rate Partners closed in the first quarter for $470 million (or about $400 per rentable foot). Currently, the property is undergoing a $28 million renovation program, which is designed to enhance 10.4% its appeal among TAMI tenants. Cushman & Wakefield and MHP down 0.8 percentage points y-o-y are jointly marketing the property’s 800,000 square feet of vacant $75.40 space. $63.28

OVERALL VACANCY RATES BY MANHATTAN SUBMARKET, Q1 2013 - Q1 2015 $57.58 Source: Cushman & Wakefield $61.90

13% $46.30 12% $38.90 11% 10.4% 10.1% 10% 9.4% 9%

8% 8.0% 7% 6.9% 7.0% 6%

5%

4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2013 2014 2015 Lower Manhattan Midtown Midtown South

Lower Manhattan Real Estate Year in Review | Q1 2015 6 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS RETAIL MARKET

Development Brookfield Place’s extensive renovation of 375,000 square feet of curated retail, restaurant, lifestyle and public space was officially unveiled on March 26. Among Brookfield’s new offerings are luxury fashion labels, contemporary brands, chef-inspired restaurants and gourmet food markets (see feature).

Opening in the next year, Westfield World Trade Center will become an iconic destination with 150 stores and restaurants in the Oculus in the World Trade Center Transportation Hub and at the base of 3 and 4 World Trade Center. The 365,000-square-foot complex previewed its extensive retail and dining roster, which will include Hugo Boss, Michael Kors, Banana Republic, and Desigual. Mario Batali’s Eataly will serve as the culinary anchor among many other food, beverage and dining options. Westfield also has partnerships with the National September 11 Memorial Museum and the CFDA/Vogue Fashion Fund and will collaborate with Lower Manhattan schools and the arts community as well.

Construction of ’s 65,000 square feet of commercial and retail space is underway, with a scheduled completion in Over 150 stores and restaurants at late 2015. Shake Shack announced this quarter that it plans to Westfield World Trade Center are expected open a location on the second floor of Fulton Center. The major to open late 2015. transportation hub debuted in November 2014 and has improved connections between nine subway lines and five existing subway stations. More than 300,000 commuters, residents and tourists are expected to cross through each day. An underground retail 3 WORLD passageway will link Brookfield Place, Westfield World Trade Center TRADE and Fulton Center, conveniently connecting all three major retail projects. CENTER

The Howard Hughes Corporation continues with the building of the new Pier 17 at the Seaport. The revamped pier and revitalized historic will provide 365,000 square feet of retail, dining and entertainment by 2017. This will include an eight-screen movie theater that iPic Theaters plans to open in early 2016 in the Fulton Market Building. Additional components of the Seaport redevelopment plan are undergoing an approvals process this year. Retail Condo Sales In the first quarter, three retail condominiums have traded in Lower The 375,000-square-foot retail complex Manhattan, reflecting almost $64 million in sales and an average opened March 26, 2015. Additional stores price per square foot of $1,273. and restaurants will open throughout the •  The Klein Group purchased an 8,800-square-foot retail summer and fall. condominium at 261 Broadway for $21.8 million (or $2,477 per square foot). Source of retail condo transactions: Cushman & Wakefield

Lower Manhattan Real Estate Market Overview| Q1 2015 7 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

•  Magnum Properties closed on a 40,000-square-foot retail condominium at 140 West Street; it purchased the property from Verizon for $40 million. Magnum is also developing the top 22 floors of this building into 166 luxury residential condominiums, which it purchased in Fall 2013 for $274 million.

•  A 1,440-square-foot retail condominium in 77 Warren Street was purchased for $2.2 million (or $1,493 per square foot). The retail condominium currently leased by Warren 77, a sports bar which holds a lease through 2023.

New Openings and Announcements throughout Courtesy of BFX Studio District BFX Studio At the end of the first quarter, the district had 1,090 stores Opened at 30 Broad Street, offering and restaurants – an 11 percent increase over last year. Lower boutique fitness facilities Manhattan saw 45 new stores and restaurants during the first quarter. • The grand opening of Brookfield Place’s repositioned retail space welcomed luxury and contemporary brands to the downtown retail scene (see feature).

• Gap unveiled a 19,000 square-foot location at 170 Broadway, at the base of the new 243-bed Marriott Residence Inn. This is the first flagship Gap to open in New York City in ten years.

• Seven shops opened in the Seaport, including Brother Vellies, Carlos Falchi Couture and William Okpo. The Courtesy of L.O.L. Kids Howard Hughes Corporation also partnered with Women’s Wear Daily in creating Seaport Studios, a 5,000-square-foot Gap space dedicated to showcasing emerging fashion designers. Opened its first NYC flagship in 10 Additionally, The Hideaway, a restaurant and bar featuring years at 170 Broadway craft cocktails and crab boils, opened in the Seaport at 22 Peck Slip

• Kuu Ramen began operating at 20 John Street in the former Roxy East-West Diner.

• 1 New York Plaza began the rollout of its refurbished retail concourse with the opening of Chipotle, and Retro Fitness. Schnippers Quality Kitchen and Naya Express will be unveiling locations in the building as well.

• Shake Shack will make its second Lower Manhattan home on the second floor of Fulton Center, with an anticipated opening in 2016. Courtesy of L&L Holdings • Legendary and influential restaurantNobu announced it Nobu is leaving for a 14,000 square-foot space in 195 Broadway’s grand lobby. The famed Japanese restaurant will Announced it will leave its Tribeca open in early 2017. location for 195 Broadway in 2017

Lower Manhattan Real Estate Market Overview| Q1 2015 8 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

Brookfield Place unveils as “the heart of the new downtown”

The wait is over at Brookfield Place. The much-anticipated $250 million redevelopment of the former World Financial Center into 375,000 square feet of curated retail, restaurant and lifestyle options was unveiled on March 26th.

Saks will open a four-floor, 75,000 square-foot store to anchor the complex. This is Lower Manhattan’s first luxury department store and is expected to open in February 2016.

During the first quarter, Salvatore Ferragamo, Tory Burch, Burberry, Luxury Retail Courtesy of Brookfield Place Satya Jewelry and Omega all began welcoming customers in the Winter Garden. Hermès, Bottega Veneta, Ermenegildo Zegna, Gucci, Davidoff Cigars, Kamakura Shirts and Aspinal of will join them later this year.

Contemporary brands Michael Kors, J.Crew, Bonobos, Diane von Furstenberg, Theory, Paul Smith, Vince, Judith & Charles, Lululemon, Cos Bar, Babesta and Posman Books were introduced in the north pavilion off Vesey Street. Later this year, Vilebrequin, Calypso St. Barth and Scoop NYC will open shops here as well.

Le District, a 30,000-square-foot, French-inspired marketplace, became a major addition to Lower Manhattan’s dining scene, featuring culinary-specific stations and fresh groceries. Beaubourg, a brasserie-style restaurant, and le Bar joined the food emporium. L’Appart, an intimate restaurant, will open later this year. Le District will also feature 7,000 square feet of outdoor dining along the Hudson River.

Lifestyle amenities, such as an Equinox fitness center (which Courtesy of Eugene Gologursky/ Public Spaces Getty Images for Brookfield Place opened in February), will be joined by the Institute of Culinary Education, inaugurating its new 74,000-square-foot facility later this spring.

Signature restaurants, L’Atelier de Joel Robuchon, Amada and Parm, plan on launching this summer and fall;

Hudson Eats, a 600-seat food hall with 14 fast-casual eateries, opened this past summer. Eateries include Mighty Quinn’s, Num Pang, Black Seed Bagels, Little Muenster, Dos Toros, Olive’s, Skinny Pizza, Umami Burger, Chop’t, Sprinkles, Dig Inn, Tartinery, Blue Ribbon Sushi and Northern Tiger.

“Lower Manhattan is rewriting its history.” Courtesy of Eugene Gologursky/ - Andrew Rosen, CEO of Theory Le District Getty Images for Brookfield Place

Lower Manhattan Real Estate Market Overview| Q1 2015 9 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

TOURISM & HOSPITALITY

Record Year for Tourism 2014 was a major year for tourism in Lower Manhattan, as the district welcomed 12.4 million unique visitors — a 30% increase since 2013 and 10% gain over 2012. Tourism is expected to continue growing throughout 2015 with the opening of the 120,000-square-foot One World Observatory on May 29. The attraction projects it will host 3 million visitors annually. Operated by Legends Hospitality, the observatory will offer iconic views, seated and casual dining, a theater and special events. Hotel Development Takes Off There are currently 5,100 hotel rooms in 22 hotels throughout Lower Manhattan – a 25 percent increase over the past year. This quarter, the Fairfield Inn & Suites opened at 161 Front Street with 176 rooms.

Currently, there are about 2,500 hotel rooms in 15 hotels under Courtesy of Hidrock Realty construction and another 1,029 hotel rooms in the planning Courtyard by Marriott stages in five hotels. In 2015, seven hotels will open, growing Lower Manhattan’s current hotel room inventory by 30 percent. Construction continues on Hidrock Realty’s 317- Altogether, this will mean almost 1,300 new rooms at the room hotel at 133 . Projected following hotels: to open late 2015, the hotel will also feature retail space and a rooftop bar • Aloft Hotel at 49 , 125 rooms;

• Four Points by Sheraton at 6 Platt Street, 262 rooms;

• Q&A , an extended stay hotel operated by Furnished Quarters at , 132 rooms; 12.4 MILLION estimated number of visitors in 2014 • Riff Hotel at 102 Greenwich Street, 20 rooms;

• The Beekman Hotel in the historic Temple Court building at , 287 rooms;

• Courtyard by Marriott at 133 Greenwich Street, 317 rooms;

• AKA Wall Street at 84 William Street, 141 rooms. Occupancy and ADR Lower Manhattan’s average hotel occupancy in the first quarter was 72%, on par with this time one year ago. The rate remains just below the New York City average of 75%, which was also on par with its performance from one year ago. During the first quarter, Lower Manhattan’s average daily room

rate (ADR) was $258, up 5% from last year and 27% higher than Courtesy of Fairfield Inn & Suites New York City as a whole. The city’s average daily room rate in New York City was down slightly, dipping 5% year-over-year to Fairfield Inn & Suites $203. Opened at 161 Front Street in March 2015 with 176 rooms Source of citywide hotel figures: NYC & Company Source of tourism estimates: Audience Research & Analysis

Lower Manhattan Real Estate Market Overview| Q1 2015 10 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

LOWER MANHATTAN HOTEL DEVELOPMENT PIPELINE Source: Downtown Alliance

Source: Downtown Alliance Owner/ Rooms/ Owner/ Rooms/ Hotel & Address Open Date Hotel & Address Open Date Developer Floors Developer Floors 107 West 1 Aloft Hotel Broadway Realty 125/18 2015 11 Four Seasons Silverstein 189 2016 49 Ann Street Corp 30 Park Place Properties 21 (of 82) Four Points by Residence Inn 2 Sheraton Lam Group 262/30 2015 (upper floors) 6 Platt Street 12 215 Q&A 132/ Courtyard by Lam Group 322/40 2016 3 70 Pine Street Rose Associates 4(of 66) 2015 13 Marriott Riff Hotel (lower floors) 4 102 Greenwich Royal United 20/5 2015 215 Pearl Street Street Builders Hilton Garden Inn McSam Hotel The Beekman Hotel GB Lodging 287 14 6 Water Street Group 249/29 2016 5 5 Beekman Street Group 9/46 2015 Courtyard by Hotel Indigo 10-12 MLane Marriott 15 10-12 Maiden Lane Inc. 190/25 2017 6 133 Greenwich Hidrock Realty 317/31 2015 Street TBD Hotel Premier Emerald AKA Prodigy 16 11-13 LLC 143/27 2018 7 84 William Street Networks 141/19 2015

Boutique hotel 17 Extended Stay Hotel Prodigy 230/23 2018 8 Battery Maritime The Dermot 61/5 2016 17 John Street Networks Building Group Boutique hotel Westbury Realty 18 TBD Hotel Fortis Property 271/33 TBD 9 24-26 John Street Associates 128/21 2016 151 Maiden Lane Group

Boutique hotel Jiten Hotel 10 100 Greenwich 192/25 2016 19 TBD Hotel Fit Investment 188/29 TBD Street Management 50 Trinity Place Group

LOWER MANHATTAN HOTEL ROOM GROWTH BY YEAR Source: Downtown Alliance

10,000

9,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017

Existing Hotel Rooms New Hotel Rooms Projected Hotel Rooms

Lower Manhattan Real Estate Market Overview| Q1 2015 11 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

RESIDENTIAL MARKET

Inventory and Development

Lower Manhattan is home to more than 60,000 residents, who live in 31,000 units in 323 buildings.

During the first quarter, construction continued on over 2,300 residential units in 12 properties. A total of 927 residential units are expected to come online in 2015 including 865 rental units and 62 condominiums. Among the projects making construction progress in the first quarter of 2014: • Excavation started at 112-118 Fulton Street. Carmel Partners’ 63-story, 460-unit condominium tower is anticipated to be completed in 2018. Dutch Street will be closed through November. Lightstone Group sold the development site to Carmel Partners last year for $171 million. • Demolition of the former St. John’s University site at 101 75-83 Nassau Street Murray is underway. Fisher Brothers and the Witkoff Group, Lexin Capital will replace existing buildings began sales in the first quarter for the 66-story, 154-unit condominium tower, now known as 111 Murray Street. with a 40-story, 197-unit residential tower.

In addition to those currently under construction, there are now more than 2,400 units across 16 properties in the planning stages. Among the projects announced as moving forward this quarter: • Lexin Capital filed permits for a 40-story, 197-unit residential tower at 75-83 Nassau Street. Lexin Capital paid $63.4 million for land and air rights in 2014 which included 75-81 Nassau Street (sold by Century 21 department store), 83 Nassau Street and the development rights at 85 Nassau.

• Lightstone Group filed plans for a 50-story residential condominium and hotel tower at Street. The firm’s plans include 188 residential units. Lightstone purchased the site for $60 million last year after flipping its development site one block away at 112-118 Fulton Street. Preliminary Rendering The group also paid $15.4 million to purchase 69,000 square feet of air rights from 92 Fulton Street, a site owned 111 Murray Street by developer Harold Thurman. Demolition of former St. John’s University site is underway. The 66-story, 154-unit condo tower expects to be completed in 2018.

Lower Manhattan Real Estate Market Overview| Q1 2015 12 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

HIGHLIGHTS OF LOWER MANHATTAN RESIDENTIAL DEVELOPMENT Rise in Average Price per Square Foot Source: Downtown Alliance

Address & Lease & Overall, the Lower Manhattan sales market slowed in the first Units Open Date Buidling Name Building Type quarter, with the total number of sales down by 36% from a year Rental Buildings Under Contruction ago. While sales totals were down, average sales price in Lower Manhattan rose 25% year over year. Meanwhile, Manhattan-wide 1 70 Pine Street Rental 644 2015 Conversion sales activity saw a 20% decrease year-over year and average

20 Exchange Place Rental sales price down by 2%. 2 Conversion 221 2015

Rental Buildings Planned for Development Lower Manhattan’s average price per square foot increased 60 Fulton Street Rental 4% over last quarter to $1,307 per square foot, but saw a 5% 1 Exhibit New Construction 120 2016 increase year-over-year. The Manhattan average price per square 110 Wall Street Rental 2 WeWork/WeLive Conversion 232 2016 foot slightly decreased from last quarter by 2% and saw a 7% decrease from last year. 180 Water Street Rental 3 Conversion 600 2017 Source of sales market data: Condo Buildings Under Construction Miller Samuel/Douglas Elliman

19 Park Place Condo 1 New Construction 21 2015 AVERAGE SALES PRICE ($) PER SF 87 Chambers Street Condo 2 Reade Chambers New Construction 17 2015 Source: Miller Samuel/Douglas Elliman $1,400 3 12 Warren Street Condo 24 2015 New Construction $1,350 $1,307 5 Beekman Street $1,300 4 Condo 68 2016 The Beekman Residences New Construction $1,250 $1,263 30 Park Place Condo $1,200 5 Four Seasons Residences New Construction 157 2016 $1,150 $1,103 50 West Street Condo 6 New Construction 191 2016 $1,100 $1,050 233 Broadway $1,036 7 Condo 34 2016 Woolworth Residences Conversion $1,000

140 West Street $950 8 Condo 166 2016 Ralph Walker Tribeca Conversion $900 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 112-118 Fulton Street Condo 9 New Construction 460 2018 2013 2014 2015 Lower Manhattan Manhattan Condo Buildings Planned for Development

68-74 Trinity Place Condo 1 New Construction 111 2017

45 Park Place Condo 2 New Construction 46 2017 More than 49-51 Chambers Street Condo 3 Conversion 81 2017

151 Maiden Lane TBD 4 New Construction 74 2017

125 Greenwich Street Condo 5 New Construction 128 2018

Condo 6 111 Murray Street 154 2018 60,000 New Construction residents

130 William Street Condo 7 New Construction 188 TBD

101 Wall Street Condo 8 Conversion 52 TBD

1 Wall Street TBD 9 Conversion TBD TBD

75-83 Nassau Street TBD 10 New Construction 197 TBD

Lower Manhattan Real Estate Market Overview| Q1 2015 13 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

CAPITAL IMPROVEMENT PROGRESS

World Trade Center (WTC) 4 World Trade Center The 72-story, 2.3 million-square-foot office tower was completed in November 2013. The building is 62% leased to the Port Authority, One World the City of New York, MediaMath, IEX and Morningstar. Silver Suites, Trade Center a short-term office provider, signed a 47,000-square-foot lease at The tallest buidling in the beginning of the second quarter of 2015. the western hemisphere opened in 2014. The 104-story, 3 million-square-foot office tower opened The 104-story, 3 million- on November 3, 2014. Condé Nast is now fully moved into the square-foot tower is building and occupies 1.2 million square feet. currently 64% leased.

The building is currently 64% leased, with tenants including Condé Nast has fully Condé Nast, Beijing Vantone China Center, U.S. General Services occupied its 1.2 million- Administration, Servcorp, KiDs Creative, High Five Games, xAd, square-foot lease. Other Incandescent Technologies, Cushman & Wakefield, BMB Group, tenants: High Five Westfield and Legends Hospitality Group. TAMI-sector firms now Games, xAd, & KiDS comprise nearly half of the building’s leaseholders. Creative. Legends Hospitality In the first quarter, the Durst Organization announced that they are will open One World adding a third floor of 47,000 square feet of pre-built office space. Observatory on May 29.

Courtesy of One World Observatory, Legends Hospitality’s 120,000-square-foot observation facility on floors 100, 101 and 102, is scheduled to open on May 29; over three million visitors are expected annually. Four World Trade Center Three World Trade Center The 2.5 million-square-foot office tower that is tentatively scheduled It opened in to top out in December 2016 and to be completed in 2018. Group November 2013. M Worldwide finalized a lease for 515,000 square feet in the fourth quarter of 2014. The 2.3 million- square-foot office tower is 62% leased. Two World Trade Center The 88-story, 2.8 million-square-foot office tower is currently Tenants include: Port being actively marketed to potential anchor tenants. In the first Authority of New York quarter, Silverstein Properties began discussions with News Corp. & New Jersey, NYC and 21st Century Fox to relocate their Manhattan headquarters Human Resources to , the final tower planned as part of the Administration, IEX, World Trade Center redevelopment. If finalized, the deal would MediaMath and account for approximately 50% of the towers 2.8 million-square- Morningstar. foot office space.

Courtesy of Silverstein Properties

Lower Manhattan Real Estate Market Overview| Q1 2015 14 OFFICE RETAIL TOURISM & HOSPITALITY RESIDENTIAL CAPITAL IMPROVEMENTS

National September 11 Memorial Museum Transportation Infrastructure The 100,000-square-foot National September 11 Memorial Fulton Center Museum officially opened on May 21, 2014 and has since Fulton Center officially opened in November3 World 2014. The Trade 65,000-square- welcomed over 2 million visitors. foot of commercial space at Fulton CenterCenter is fully leased and tenants are The National September 11 Memorial, which opened in September expected to include beauty salons, drugstores, and grab-n-go eateries. 2011, has drawn more than 18 million visitors. With financing in The retail portion is expected to open lateplace, 2015. the building is scheduled to be The World Trade Center Transportation Hub South station completed in 2018. The 800,000-square-foot space will house the PATH station and The Metropolitan Transportation Authority awarded a $194 million Westfield’s 350,000-square-foot retail complex and connect to contract to rebuild the subwayGroupM station that signed was damaged a Fulton Center on the east and Brookfield Place on the west. In in . The station will benefitlease from for permanent 515,000 flood advance of the opening of the World Trade Center Transportation protection measures, become wheelchairsquare accessible feet and in allow the entry2.5 and Hub, the temporary PATH station deconstruction is scheduled to exit for ten cars along the No. 1 line. Completionmillion-square-foot is expected in 2017. begin in the second quarter of 2015; and new entrances and exits office tower. will be relocated to WTC Towers 2 and 4. Broadway Reconstruction The Department of Design and Construction launched a $42 million Pier 17 Redevelopment capital reconstruction project on Broadway, referred to as Broadway The Howard Hughes Corporation completed the deconstruction 1, stretching from Ann Street to Rector Street. This project will involve of Pier 17 and pier replacement and superstructure will continue replacing all underground infrastructure — including water mains, through 2015. The development plan includes 365,000 square sewers, electric, gas and other utilities — as well as constructing new feet of retail, dining, and entertainment space, as well as a new food streets and curbs. Crews will focus on two blocks at a time, moving market in the Pier 17 building. northward on the west side, then southward on the east side. The full project is scheduled to be finished in 2017. Battery Park Phase I of Bikeway opened with expanded pedestrian sidewalks and seating. Phase II, beginning in 2015, will connect Manhattan’s east and west bike paths. The SeaGlass Carousel will open this Memorial Day.

The Battery Oval, a three-acre lawn, will reopen to the public in 2015. The space has an audience capacity of 5,000 people. In the fall, the Oval will be populated by 300 chairs chosen in a design competition.

In March 2015, the Mayor’s Office announced that $8 million will go to flood protection design and the first phase of implementation The 800,000-square-foot facility will house at Battery Park. Another $6.75 million will go to advanced planning the PATH station and Westfield’sCourtesy of Battery350,000- Park Conservancy and environmental review for comprehensive flood protection Batterysquare-foot Park retail complex, as well as offering from the Manhattan Bridge along the tip of Lower Manhattan until underground connections to Fulton Center the north end of . In total, the city and state have Bikewayand opened Brookfield in April Place. and the SeaCarousel will devoted $14 million to plan and build resiliency infrastructure in debut this summer. The Battery Oval, the three-acre Lower Manhattan. lawn, willCompletion open later is this scheduled year for late 2015.

Lower Manhattan Real Estate Market Overview| Q1 2015 15 Visit www.downtownny.com/research for additional publications on the Lower Manhattan real estate

market and economy. Documents include a complete list of residential and hotel developments, available

retail spaces, a summary of leasing incentives and other research reports including:

TAMI Takes Lower Manhattan, a report on the growth of technology, advertising, media, and information companies moving south of Chambers Street;

Everything Old is New Again: Conversions of Historic Properties in Lower Manhattan, a report on historic properties preserved through significant investment and changs in use;

The Golden Age of Transit in Lower Manhattan, a report released on Fulton Center’s opening, describing the more than $6.4 billion of transit investments since 2005 and how these investments benefit a large, and growing labor force;

Going to the Head of the Class: The Growth of Higher Education in Lower Manhattan, a report on the growth of higher education in Lower Manhattan;

A Surge of Bits and Bytes: The State of Tech and Innovation in Lower Manhattan, a report on Lower

Manhattan’s growing technology industry;

The Brain Gain, a report on how the region’s shifting demographics are favoring the Lower Manhattan business district;

If you have questions or require additional information,

please contact [email protected]

Alliance for Downtown New York 120 Broadway Suite 3340 New York, NY 10271 212.566.6700 DowntownNY.com Telephone: 212-835-2787 Email: [email protected]